Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein visited the Chicago headquarters of Groupon Inc. yesterday to pitch executives on hiring his firm for a possible share sale, a person familiar with the matter said.
Morgan Stanley is also in talks with Groupon to arrange an initial public offering, said the person, who asked not to be identified because the discussions are private.
Goldman Sachs aims to win the mandate to handle a sale for Groupon, a two-year old company that rebuffed a $6 billion takeover offer from Google Inc. last month. The startup this week announced a round of funding said to value it at $4.75 billion and now is weighing an IPO that may give it a $15 billion valuation, people familiar with the matter have said.
Julie Mossler, a spokeswoman for Groupon, and David Wells, a spokesman for Goldman Sachs, based in New York, declined to comment. Pen Pendleton, a spokesman for New York-based Morgan Stanley, also declined to comment.
Goldman Sachs and Morgan Stanley are among securities firms vying for lucrative assignments to arrange what may become a surge in multibillion-dollar IPOs for Web startups.
LinkedIn Corp., the largest networking site for professionals, is planning a share sale this year and is working with banks including Morgan Stanley to complete an IPO prospectus by the end of the first quarter, according to people familiar with the matter.
Goldman Sachs, Morgan Stanley
Goldman Sachs led a recent $500 million funding round for Facebook Inc., valuing the social-networking site at $50 billion. The securities firm is also using a special-purpose vehicle that will let clients buy Facebook equity worth as much as $1.5 billion, according to people familiar with the matter.
The backing leaves Goldman Sachs in a prime position to handle an eventual share sale by Facebook, based in Palo Alto, California.
Groupon isn’t currently discussing the creation of a special-purpose vehicle with Goldman Sachs, according to the person familiar with those talks.
Blankfein wasn’t among banking executives who met on Jan. 13 with officials from the Treasury Department and American International Group Inc. to explain why their institutions are best suited to handle the sale of the government’s stake in the insurer, a person with direct knowledge of the meetings said.
Bank of America Corp. CEO Brian T. Moynihan, JPMorgan Chase & Co. CEO Jamie Dimon and Morgan Stanley CEO James Gorman attended the meeting in New York, this person said. Goldman Sachs was represented by President Gary Cohn.
Groupon could use money raised in an IPO to step up international expansion plans. The company said it will use some of the $950 million in funding announced this week to let employees and early investors sell shares. Private companies must keep the number of shareholders below 500 or they are subject to reporting requirements by U.S. regulators.
Groupon sends daily deals to 50 million subscribers in 35 countries, up from 2 million subscribers in the U.S. a year ago. It offers daily discounts of as much as 90 percent from businesses such as restaurants, nail salons and clothing stores. It then keeps a portion of the revenue.
Investors in Groupon’s most recent funding round include venture capital firms Andreessen Horowitz, Greylock Partners and Kleiner Perkins Caufield & Byers.
Vying With LivingSocial
Groupon was looking at raising money from investors when it entered the talks with Google last year. Groupon was advised by Morgan Stanley and Allen & Co. in those discussions. They fell apart on Dec. 3 because of concerns by Groupon CEO Andrew Mason that a takeover would sap morale and alienate business clients, a person familiar with the matter said then.
While it leads the daily deal market, Groupon faces mounting competition from rivals such as LivingSocial. That company received $183 million in an investment round led by Amazon.com Inc. last month.
Digital Sky Technologies, a Moscow-based investing firm, led an earlier round of financing in Groupon, valuing the company at about $1.3 billion.